GWM Market Direction Model Change!

The GWM Long/Short Folio will now seek good entry points for inverse positions (shorting the market).  For now we will avoid taking on new equity positions. Furthermore, we will reduce or eliminate current equity positions and favor high quality bonds and inverse equity positions.

Precious metals positions will be maintained or increased
based on market behavior.

Upcoming stock market bounces or rallies will be sold rather than bought as they are likely to fail. I will not be buying the dip initially. 

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http://www.gerritzwealthmanagement.com/

This blog post does not constitute an offer of investment advice. This blog is only provided for educational purposes. Please read the Important Blog Disclosure posted in the right channel bar.

Friday Morning Jobs Report - NO NEW JOBS

The Bureau of Labor Staticstics issued the following bad news report this morning. This is clearly confirmation that the economy is in trouble. The markets responded immediately by selling off. We now have to wait for the President's joint congress address next week to see if he has a meaningful solution.

In a paradoxical way the market may actually welcome the bad news as it could be an incentive for the Fed to rekindle some form of quatitative easing. So the market may be in a wait and see mode until the upcoming two day Fed meeting next week.

"Nonfarm payroll employment was unchanged (0) in August, and the unemployment


rate held at 9.1 percent, the U.S. Bureau of Labor Statistics reported today.

Employment in most major industries changed little over the month. Health

care continued to add jobs, and a decline in information employment reflected

a strike. Government employment continued to trend down, despite the return

of workers from a partial government shutdown in Minnesota."

The Gerritz Letter

The September issue of The Gerritz Letter has been published. It should be in your mailbox now.
 
It will also be posted on the GWM website later this morning.
 
http://www.gerritzwealthmanagement.com/
 

Pulled the Trigger on Ruger

After making a 12.5% rate of return in less than a week, I sold Sturm & Ruger. There is an old saying on Wall Street that says, "Bulls make money and bears make money but pigs get slaughtered."

All Eyes on Ben Bernanke on Friday

The market is eagerly looking forward to Ben Bernanke's comments in Jackson Hole on Friday. Every word will be sliced and diced. In particular, investors will be looking for comments on possible future quantitative easing programs; in other words will the printing press start up again if needed?

Warren Buffet announced today that he is going to inject $5 billion into Bank of America, a badly needed rescue. The move backstopped the financial sector this morning. With that unexpected news I closed our inverse positions in the financial sector. I probably should have held on a little longer as the initial bounce in the sector was faded later in the day.


On another note, our bond positions in the Flexible Income folio are bouncing back. Additionally, I did add a little to our extremely small Apple position when it backed off on the news that Steve Jobs is retiring as CEO. I also bought some McDonalds and a little Sturm and Rugar, a gun maker that can't make guns fast enough to keep on the shelf. Evidently people feel they need a gun in the new economy. Ha-Ha.

Gold Stopped Out

We got a Smart Stop sell signal for gold today. In adherence with our risk management discipline, I sold GLD. Additionally, in a discretionary move I also closed out gold miners (GDX) and silver (SLV).

After getting over $1,900 an ounce gold suffered a quick reversal. I still think the precious metals will move higher in the future, but I feel it is prudent to step aside for the moment.

The market is much confused at the moment. It is searching for direction and there is no consensus on whether the market should rise or fall. All asset classes are being affected, include most of what we own. Stocks are very oversold and a bounce is warranted, but the intra-day moves are absolutely unpredictable, making it hard to commit money.

This type of volatility is generally not a good sign. While the opportunities might very well exist, the risk levels are off the charts.

This blog post does not constitute an offer of investment advice. This blog is only provided for educational purposes. Please read the Important Blog Disclosure posted in the right channel bar.

Additional Positions Added to GWM Model Portfolios

I took a position in another ag related ETF, Grains (JJG).


This is another one that held up well during the sell-off.

I also bought an accidental high yielder that CNBC's Cramer always pounds the table on, Annaly Capital. This one has a very high dividend payout.

This blog post does not constitute an offer of investment advice. This blog is only provided for educational purposes. Please read the Important Blog Disclosure posted in the right channel bar.